The company has completed about 95 percent of an airborne
geophysical study and plans to conduct a two-dimensional survey
of a 4,000-kilometer (2,485-mile) area in the semi-autonomous
northern Somali region, Dualeh said in an interview yesterday in
Ankara, the Turkish capital. Patrick D’Ancona, a spokesman for
London-based Genel, declined to comment beyond its annual
results statement issued on Feb. 28.

The “initial map shows big, promising basins,” Dualeh
said, adding that Genel hasn’t interpreted all of the data yet.
“That does not mean there is oil there. There is still a lot of
work to do: 2-D seismic, exploratory drilling, a lot of
processes. It looks promising.”

Licensed Blocks

Somaliland has licensed one-third of its oil fields where
the Anglo-Turkish company Genel operates in five blocks, with
plans to drill a first well by mid-2014, said Dualeh. Ophir
Energy Plc (OPHR) of the U.K. is also in negotiations for a 2-D seismic
contract and may start drilling in 2015, he said.

“It is a no brainer, there is oil” said Dualeh. “It is a
matter of finding commercial qualities.”

Somalia, particularly its northern regions of Somaliland
and Puntland are a “southward extension of the lucrative
geologic framework of the Arabian Gulf” that includes Saudi
Arabia, according to Osman Salad Hersi, an associate geology
professor at the University of Regina in Canada. Saudi Arabia is
the world’s biggest oil producer.

“The country, Somalia, including Somaliland, can
potentially be the Saudi Arabia of East Africa,” Hersi said in
an e-mailed response to questions. “But the instability of the
country within the past 30 years or so hindered any meaningful
hydrocarbon exploration.”

No Recognition

Somalia has been wracked by more than two decades of civil
war since the fall of Mohamed Siad Barre’s dictatorship in 1991.
Somaliland declared independence after Barre was removed from
office and the former British protectorate has yet to gain
recognition as a sovereign nation by any other country or
foreign institution.

“Lack of international recognition for their unilateral
secession and not being part of the internationally-recognized
Federal Somalia of Mogadishu puts Somaliland in limbo,” said
Hersi.

Somaliland is negotiating with other unidentified
international oil companies hoping to sign exploration contracts
in 2013. Cnooc Ltd. (883), the state-owned Chinese oil company, and
Canadian and Australian companies are already forging oil deals
with the Somali government and that of the semi-autonomous
region of Puntland.

“We have not had any active exploration on such a scale
until now,” said Dualeh. “Genel is really leading the charge
in really putting together a very aggressive big exploration
campaign to really evaluate the potential of Somaliland.”

Hayward resigned from BP, Europe’s second-biggest energy
company, in October 2010 following the Gulf of Mexico disaster.
He teamed up with financier Nathaniel Rothschild to create
Vallares Plc, a shell company that raised 1.33 billion pounds
($1.98 billion) through an initial public offering in London in
June 2011. Vallares agreed to merge with Genel in September 2011.

Shares in Genel fell less than 0.1 percent to 794.50 pence
in London yesterday. The stock has gained 1.9 percent so far
this year.

In August 2012, Genel was awarded an exploration licence
for onshore blocks SL-10-B and SL-13 in Somaliland, with a 75% working interest
in both. Genel extended its presence in November 2012 with the acquisition of
50% participating interest in the Odewayne Production Sharing Agreement which
covers blocks SL-6, SL-7, SL-10A.

Onshore Somaliland is a relatively unexplored region,
with few exploration wells drilled. The total size of the blocks is
approximately equivalent to the entire Kurdistan Region of Iraq.

Genel took the opportunity because of encouraging
indications including onshore oil seeps and existing geological data showing
favorable conditions for hydrocarbons to have accumulated in numerous large
tilted fault blocks and sub-basins. In addition, the basins of Somaliland were
contiguous to Yemen prior to the opening of the Gulf of Aden in the
Oligocene-Miocene - similar sedimentary sequences and structural styles are
expected in Somaliland.

We are targeting resources of over 1,000 mmbbls in blocks
SL-10B and SL-13. The Odewayne block has a similar resource potential to this,
targeting in order of 1,000 mmbbls. A substantial 2D seismic campaign is to
commence for all the blocks in the second quarter of 2013, with the first
exploration well targeted for the second half of 2014.

HORNWATCH

Suleiman Bolaleh has been a human rights researcher for more
than two decades, and now is the chairperson of leading human rights watchdog
in Somaliland. He enjoys researches, politics and books -- not necessarily in
that order.